It's getting rid of cheap methods.
Scantrons and bluebooks were always a way that made it cheap for institutions to produce results. Now those methods kinda seem silly, right?
500 person freshman lectures seem kinda absurd now, right?
Teaching via adjuncts that had 3 days notice for the class and are paid nothing is kinda scammy, right?
R1s professors whose tenure evals have nothing to do with teaching is kinda wrong, right?
The Oxbridge model of 5-10 person classes with a proctor is what the education with AI is going to be about. It's small, intimate, and expensive.